"Income inequality in the United States and elsewhere has been worsening since the 1970s. The most striking aspect has been the widening gap between the rich and the rest. This ominous anti-democratic trend has finally found its way into public consciousness and political rhetoric. A rational and effective policy for dealing with it—if there is to be one—will have to rest on an understanding of the causes of increasing inequality. The discussion so far has turned up a number of causal factors: the erosion of the real minimum wage; the decay of labor unions and collective bargaining; globalization and intensified competition from low-wage workers in poor countries; technological changes and shifts in demand that eliminate mid-level jobs and leave the labor market polarized between the highly educated and skilled at the top and the mass of poorly educated and unskilled at the bottom. Each of these candidate causes seems to capture a bit of the truth. But even taken together they do not seem to provide a thoroughly satisfactory picture. They have at least two deficiencies. First, they do not speak to the really dramatic issue: the tendency for the very top incomes—the '1 percent”—to pull away from the rest of society. Second, they seem a little adventitious, accidental; whereas a forty-year trend common to the advanced economies of the United States, Europe, and Japan would be more likely to rest on some deeper forces within modern industrial capitalism. Now along comes Thomas Piketty, a forty-two-year-old French economist, to fill those gaps and then some. I had a friend, a distinguished algebraist, whose preferred adjective of praise was 'serious.' 'Z is a serious mathematician,' he would say, or 'Now that is a serious painting.' Well, this is a serious book." (TNR)
"There was a time not so long ago when the vast majority of experts agreed that a country could not emerge decisively from a financial crisis unless it solved problems of both 'stocks' and 'flows' -- that is, secured a flow of money to cover its immediate needs and found a way to manage its stock of outstanding debt over time.In Europe today, this conventional wisdom appears to be fading. The temptation there is to declare victory having solved only the flow, not the stock, challenge.The flow/stock intuition is quite straightforward. In the first instance, a crisis-ridden country must generate enough resources to meet its pressing funding needs, and do so in a manner that does not erode its growth potential. Soon thereafter -- or, even better, simultaneously -- the country needs to realign its longer-term payment obligations in a manner that is consistent with both its ability and willingness to pay.Unless a country does both, the productive commitment of its own people and companies will be too tentative to drive a full and proper recovery. It will also be a lot harder to attract the scale and scope of long-term foreign direct investment that is so helpful for enhancing growth, jobs and national prosperity. The need for a comprehensive approach was most vividly illustrated during the Latin American debt crises. Having secured sufficient emergency financing and embarked on serious economic reform efforts, the successful countries devoted lots of effort to improving their debt maturity profiles, better aligning the currency composition of their debt and, most important, reducing the size of their contractual obligations. These efforts were instrumental in productively re-engaging the domestic private sector and in attracting sizable foreign investment.
Peripheral countries in the euro area -- such as Greece and Portugal -- have done a lot to deal with their flow challenges over the last few years. They have also made some progress in addressing stock challenges, yet quite a bit remains to be done." (Bloomberg)
"Last night I went to see Liz Smith interview Frank Rich and Alex Witchel at the Cosmopolitan Club on East 65 and 66th Streets. Billed as 'An intimate evening of conversation' moderated by Liz, that is exactly what it was. Or as intimate as two adults/writers are going to get in a room of a hundred people. Liz has been conducting these interviews (last year I think it was Whoopi Goldberg) every year to benefit Maria Droste Counseling Services. Founded by the Sisters of the Good Shepherd 32 years ago and named for a Good Shepherd sister who was renowned for her ability to console those who came to her in pain. The Mission of the Counseling Services is to provide affordable therapy. Last night’s benefit raised funds that will augment that mission. Elizabeth Peabody, who works at the Services, organized this annual benefit and produces it each year.This was the first of these interviews that I’ve attended. Guests were provided with tables and chairs, as you can see, and hors d’oeuvres (excellent) were passed along with wine, sparkling water, etc. It was a middle-to-older crowd, not surprisingly, many of whom know each other, perhaps through the club, or professionally, or socially. I saw many faces that I see when I am out and about, or at dinner or lunch, or a culture event. It’s kind of a neighborhood of mutual interest and curiosity. There was also a center table of Barbara Walters, Peter Brown, Marie Brenner and Ernie Pomerantz, Suzanne Goodson, Lesley Stahl and Aaron Latham, all close acquaintances or friends of the three conversers. For me it was somewhat of a Proustian moment in that last night was the first time I’d crossed the threshold of the Cosmopolitan Club since the day I changed my life at age 23 and got married, in October 1964. The Cos Club is mainly a private woman’s club where a lot of wedding receptions and dinners are still held. I remember the day very well, of course, from morning (early) to night (late) in Nassau, the Bahamas. The first and only time I was there also." (NYSD)